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Economic Empowerment Center dba Lending Link
4706 S 24th St. Omaha, NE 68107
www.lendinglinkomaha.org
https://www.facebook.com/LendingLink/
Daniel Padilla
Executive Director
dpadilla@lendinglinkoamha.org
+1 (402) 557-5965
Yes
Yes. Lending Link’s executive team is comprised of two individuals, Daniel Padilla, Executive Director, and Jerry Byers, Chief Financial Officer. Mr. Padilla has worked in the financial services industry for over 20 years. He has been involved with developing lending strategies for unbanked and underbanked markets for several years. He is passionate about his civic involvement, and he has served on many organizational boards and task forces dedicated to improving the financial well-being of the members of the community. Mr. Byers has worked in the financial industry for over 20 years. He has been involved in analytical and financial management roles. He has served on several boards in the Omaha community and is passionate to see better alternatives for short term lending to help people dig out from financial setbacks that life throws their way. The organization is also governed by a board of directors with six members.
Lending Link employs six full-time individuals, including an executive director, chief financial officer, and four (4) client service representatives. All staff members are financial service professionals who have experience in banking, finance, tax preparation, and social services. Staff strive to help individuals increase their financial assets, improve their well-being, and secure a more secure financial future. Five of Lending Link’s bilingual and cultural employees speak Spanish. If grant funding is awarded through this proposal, Lending Link will hire an additional three bilingual client representatives to work with program participants.
Lending Link is a mission driven nonprofit dedicated to reducing poverty and increasing access to capital in Omaha's low-income, minority, and immigrant communities. The organization’s services help clients meet immediate financial needs and improve long-term financial well-being by providing free financial education and coaching, need-based financial aid, and assistance on terms significantly more favorable than that available in the market. Lending Link’s programs include: Financial Education and Coaching—Lending Link provides one-on-one education and group classes. The agency helps clients understand their credit score, access medical bill payment assistance, and identify costly recurring expenses. As part of the organization’s education and coaching program, it also covers budgeting, sending money overseas, lease education, debt management, and identity theft prevention. Tax Preparation—Lending Link prepared over 1,600 free tax returns in 2021 and 1,900 in 2022. Lending Link has prepared tax returns at no charge since 2019 and is an IRS-approved Volunteer Income Tax Assistance (VITA) site. As the agency prepares tax returns, it educates clients on payroll deductions, claiming dependents, and employer-provided healthcare and retirement benefits. Lending Program—Lending Link started the lending program in June 2019. The agency offers small loans at 5% interest with terms that ensure manageable monthly payments. Loans are made to clients based on the individual's personal and financial situation, not on a credit score. Lending Link’s model helps individuals who might typically seek an online payday advance or a predatory loan, thus avoiding a vicious cycle of predatory lending. Other free services—Lending Link provides other vital services such as translation, assistance with the paperwork required for business formation with the Secretary of State, and notary services, all at no charge. Lending Link is requesting funding to support the provision of approximately 180 grants to small businesses or homeowners. The agency's proposal for funding aligns directly with its mission and goals of reducing poverty and increasing capital among disadvantaged and underserved communities. Lending Link has extensive experience managing and disbursing a large number of grants; the agency maintains a lending portfolio of around 1,000 loans regularly. Lending Link also has experience managing a grant portfolio of over $18,000,000 and disbursing over 20,000 grant checks as direct assistance to individuals in Nebraska. In January, Lending Link became a Community Development Financial Institution (CDFI). CDFI Certification is given to organizations that specialize in providing financial services in low-income communities and people who lack financing access. This year Lending Link also received a technical assistance grant from the CDFI fund in 2021. CDFI Certification will allow Lending Link to expand its lending services and increase its impact in the area. The CDFI fund has also approved Lending Link with a second technical assistance grant in 2022.
Small Business and Homeowner Grant Program
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5000000.0
Service/program
Lending Link is respectfully requesting funding in the amount of $5,000,000 to support the provision of grants to small business owners and homeowners who reside in a South Omaha qualified census tract. The individuals served by Lending Link are a part of a population that often falls victim to the predatory business model of online payday lenders, pawn shops, and predatory local lenders in an industry that has a long history of exploiting the poor, particularly minorities and immigrants. Since payday lenders are no longer allowed to operate in Nebraska, individuals seeking financial help turn to pawn shops, predatory street lenders, or go to a payday lender in Iowa, where the practice is still allowed. Payday lenders target individuals who are often a part of a minority population and have lower levels of education. Since they are the sole providers for their families, single parents are especially vulnerable to their tactics when an emergency arises. The grants provided through this program will support individuals and businesses in some of Omaha’s most economically disadvantaged communities and decrease the dependence on payday lenders, while increasing self-sufficiency and economic growth. Small business owners receiving grant funds must be sole proprietorships or one-member LLCs, and homeowners who are eligible for the grant program must be using the funds to renovate their home. Landlords will not be eligible for grant dollars. Lending Link estimates that 180 grants will be provided, at an average of $25,000 each. All grantees must agree to controlled disbursements, where Lending Link reviews all pending disbursements. Lending Link will also offer financial education and technical assistance to business owners or homeowners. This assistance will be provided one-on-one and teach program participants about budgeting, eliminating debt, credit, and managing expenses. The agency will dedicate three full-time employees to managing grant disbursements and providing financial education and technical assistance to grantees. Grantees will be required to meet with Lending Link staff for coaching and to develop a financial plan to be carried out over the course of the individual’s grant cycle. Grants will be disbursed throughout the grant period, commencing in 2023.
This grant program will be on-going until the exhaustion of funding received. Grants will be provided on a first come, first served basis. Small business owners or homeowners seeking funding will be required to provide basic information to ensure that they are eligible for the program. Grantees must agree to controlled disbursement of funds and be required to submit monthly reports justifying their expenditures. Grants will be disbursed between 2023 and 2025. An estimated 25 percent will be disbursed in 2023, 50 percent in 2024 and 25 percent in 2025. Grantees will receive financial education and technical assistance throughout the duration of the grant period.
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Transformational (i.e., a proposal that will help energize, recharge, or spur significant and favorable advancements in North or South Omaha's function or appearance)
Other Sustainable Community (i.e., create or enhance housing, services, education, civic uses, recreation, etc.)
Small business development across multiple sectors
The small business and homeowner grant program will increase sustainability in South Omaha by supporting a variety of individuals and businesses that serve multiple sectors of the community. The needs listed in the North and South Omaha Economic Recovery Coordination Public Engagement Summary support the need for small business assistance, job creation, and development of owner-occupied workforce housing. With grant funds, Lending Link will disburse $4,500,000 in grants by 2025. Approximately 180 grants will be made, at an average of $25,000 each. Grants will be made to small business owners seeking financial support and homeowners who are seeking funding to make renovations on their homes. Grants will be made to clients based on the individual's personal and financial situation, not on a credit score. This model helps individuals who might typically seek a payday advance, thus avoiding a vicious cycle of predatory lending. The remaining $500,000 requested will be used to support the program’s operations, as well as provide financial assistance, technical assistance, and coaching to program participants.
The proposed project directly aligns with the needs expressed by community members in the Visioning Workshop. The summary of the workshop describes the need for support in multiple sectors of the community. The proposed grant program will allow small business owners, as well as homeowners, to improve most areas listed in the “sustainable community” focus.
Under LB1024, grant funds must be used to promote economic recovery for communities and neighborhoods within qualified census tracts that were disproportionately affected by COVID-19. The bill places an emphasis on assistance to small businesses, job training, and business development. This proposal directly addresses each of these areas of importance. This grant will provide low-barrier financial opportunities to help small business owners who were negatively impacted by COVID-19. The infusion of funds will allow for revitalization or growth of their businesses with the infusion of household capital. Homeowners will reap the benefits of grant funds and contribute to the development of owner-occupied workforce housing.
It is anticipated that the small business owners who receive grants will hire additional personnel with the funding. Over the grant period, Lending Link estimates a total of 130 new jobs will be created. Approximately 38 percent of the jobs will be temporary or construction-based, and 62 will be permanent. Lending Link will require grantees to report on the creation of any new permanent, temporary, or construction jobs. The grant will also create three new internal positions for Lending Link.
80
50
$40,000-$60,000
The proposed project will bring additional jobs to Omaha for businesses and contractors through grants provided to individuals and small businesses. Individuals seeking a grant to renovate their home may use a contractor or other business to make repairs or renovate the home. Small businesses will create new jobs as they see necessary, which may include job creation for contractors. All jobs created through this grant will be located in a South Omaha qualified census tract.
According to a 2016 survey by the Federal Reserve, nearly half of Americans have almost no savings. For people in this situation, a sick child, a needed car repair, or a broken household appliance can be catastrophic. Many, facing even the smallest of emergencies, with no savings and no credit, turn to payday lenders. Payday loans are short-term loans with high interest rates intended to be paid back when the borrower receives their next paycheck. According to the Consumer Financial Protection Bureau (CFPB), such loans have an annualized rate of about 390 percent. For example, a $500 loan would cost a borrower over $2000 after one year at that rate. The exorbitant rates and fees make it nearly impossible to pay off, which traps the borrower in an endless cycle of payday loans. Other traditional lending institutions require verification of income, which for self-employed, sole proprietor business owners is traditionally verified by tax returns. Many of these individuals show limited income on tax returns, limiting the credit worthiness for traditional credit terms. The proposed grant program will mitigate many of the issues faced by numerous small business owners and homeowners. For small business owners, additional capital is essential for sustainable economic development. Further, homeowners utilizing grant funds will improve local neighborhoods by reducing the number of homes in need of repairs and maintenance.
This grant will impact the quality of life for nearly all who are directly served, as well as those who are indirectly served. For example, because of the grant project, many individuals will receive new jobs. The expansion in businesses due to increased growth in workforce with the creation of new jobs, will in turn help stimulate economic growth and sustainability within the community. The success and expansion achieved by the small businesses which are served is anticipated to be felt in the “pay it forward” mentality of the population served. Those receiving assistance will have additional means to give to service organizations and potentially provide additional educational opportunities to their children, perpetuating the cycle of wealth. Funds may also be the push or assistance needed to start their own business, creating entrepreneurial opportunities for those with the skills and drive to be self-employed, but lack startup funds. The support to businesses owners will give individuals additional tools to be successful in their endeavors and grant funds will help small businesses reach their goals and continue expanding into the future.
Lending Link has a close and collaborative relationship with many area non-profit organizations serving residents from South Omaha. The agency works closely with organizations to provide financial education and tax preparation for those serving the area and collaborate to avoid the duplication of services. Many of the other organizations providing similar services in Omaha are in other parts of the city or in different, less accessible neighborhoods. The Lending Link office is in the qualified census tract 32 and serves primarily individuals who are from racial or ethnic minority backgrounds. Seventy-two (72) percent of those served identify as Hispanic or Latino. The proposed project will provide an innovative financial opportunity to these underserved and disadvantaged individuals as they seek financial assistance to help their small business or renovate their home. The grant provided will not need to be repaid, and grantees will receive extensive financial education, coaching, and technical assistance throughout their grant cycle. The support provided by Lending Link adds a unique feature to the grant program and will create increases in financial literacy.
The short-term outcomes of the project will include increases in the availability of new and part-time jobs, increased financial literacy, increased capital, increased financial stability, decreased use of payday lenders, improved cash flow, and decreased financial fragility. The long-term impact of the grant program will be illustrated through lower levels of debt among minority populations, higher rates of asset accumulation, increased credit scores, higher home values, lower unemployment rates, and increased economic vitality.
The outcomes of this project will be measured through data collected by program grantees. Lending Link will request reports from grantees monthly, along with justification for grant dollars expended. The amount of funds infused into the local economy through purchased goods and services will be tracked to show further economic impact. In 2022, Lending Link began to formally evaluate its services with an assessment designed to measure the impact of financial coaching and loan services on clients’ financial well-being. Lending Link financial coaches will ask clients to complete a self-assessment at grant initiation and again 12 months later. Changes in the clients’ assessments will measure the impact of the grant program on household financial status. Grant recipients will be surveyed to determine if payday loan utilization has decreased or eliminated, changes to household income levels year over year, amount of household debt and sources of debt.
No. Funding must be directly invested into the home or business.
Yes
Yes. Lending Link will partner with Canopy South, which is redeveloping part of South Omaha with a mission to generate holistic and effective revitalization in South Omaha neighborhoods through strategic partnerships and community-driven initiatives, with goals centered on dismantling systemic barriers to reinforce equitable access to opportunity for all. The organization does not have the resources to assist individual small businesses or homeowner-occupied residents. These individuals identified by Canopy South will be referred to Lending Link and this project. There will be no exchange of fees in this partnership.
If a grant is approved, Lending Link will work with Canopy South to prepare and execute a Memorandum of Understanding.
No
Lending Link’s office is located in South Omaha at 4706 S 24th St. Omaha, NE 68107. This is where the grants will be disbursed, and technical assistance will be offered. The small business owners and homeowners who receive grants through this program will be required to be physically located in South Omaha within a Qualified Census Tract.
Within one or more QCTs
The requested funding amount ($5,000,000) is comprised of $4,500,000 in direct grants to small businesses and homeowners and $500,000 in operational and technical assistance funds. Lending Link estimates that a total of 180 grants, averaging $25,000 each, will be disbursed during the grant period, equaling $5,000,000.
Grant funds will be used to support the disbursement of $4,500,000 of grants to small businesses and homeowners seeking financial assistance for renovations of their home. Funding will also support indirect or operating costs associated with the project in the amount of $500,000, or 10 percent of funds. Operating costs will include the provision of financial education, coaching, and technical assistance to program participants.
Yes
The executive director will oversee the management of the grant program. The agency’s chief financial officer will monitor and track all expenses. Three bilingual staff members will be hired to work directly with program participants. Lending Link has the capacity to manage this grant project through a robust organizational structure, clear job descriptions, long-standing relationships with community members and organizations, strong financial internal controls, and detailed, regularly updated policies. All the funds awarded under this program will be maintained in a manner in which they will be accounted for separately and distinctly from other sources of revenue funding. Lending Link will record all expenses and revenue to the specific grant or program generating the expense or revenue and follow written financial policies. Topics covered in the policies include a double-entry system of bookkeeping, generally accepted accounting principles, annual operating budget, financial statements, an annual audit conducted by an independent public accountant, internal safeguards and controls, bank account reconciliations, receipts, and deposits, purchasing supplies, dual signatures on checks, payroll, inventory of physical assets, records retention, cash reserves, grant compliance, and drawdown of federal funds.
There is no committed funding for this project, nor are there any applications for funding that are pending. Lending Link will pursue funding opportunities from private funders, as well as federal, state, and local government entities, to fill any gaps in funding.
The requested funding for grants is the only direct expenditure for the program. Lending Link has requested indirect, operational funds in the amount of $500,000 to administer the program and provide technical assistance/financial coaching. With a reduced or smaller grant award, Lending Link will still be able to provide grants to small businesses and homeowners; however, the quantity of grants disbursed will decrease.
Yes
Lending Link is requesting $5,000,000 to be disbursed between 2023 and 2025. The budget for the grant has been designed with the assumption that approximately 25 percent of funds will be disbursed in 2023, 50 percent in 2024, and 50 percent in 2025. The program budget assumes that 180 grants will be made at an average of $25,000 each. There is no set grant size, and the number of grants made may vary. By 2025, a total of $4,500,000 in grant dollars will be disbursed. The overall scale of the project can be adjusted, and a smaller overall grant portfolio awarded to residents and homeowners. If the overall award is less than the proposal, fewer staff members will be hired to administer the program.
Lending Link will hire an additional three FTEs to help disburse grants, provide financial education and coaching, and provide technical assistance. The agency will cover any other indirect costs not supported by the grant, including expenses such as office space and incidentals.
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Data table of uses (breakdown of how the requested funds will be used for your proposal) Organizational Chart Pro Forma Proposal Budget/Sources and Uses Schedule